Bigger is better as McDonald's plans UK push

Fast food giant McDonald's is planning bigger burgers and fancier places to eat them in as part of a drive to boost its business in the UK.

In its twice-yearly conference call with analysts and investors on Tuesday, the company said sales in the UK are up 4.6% for the year to date and that the group is gaining market share.

Denis Hennequin, president of McDonald's Europe, said that the UK is the company's most challenging market but he saw "tangible progress" and "continued momentum" this year.

The company is making a number of moves to drive the UK business forward, including re-vamping its restaurants. It expects to complete 100 by the end of this year and will upgrade another 200 next. "You can't sell a $4 salad in a $2 dining room," said McDonald's president Ralph Alvarez, referring to the company's global upgrade programme.

More adult-sized burgers will appear on UK menus and the stores will stay open longer. Already on the UK menu are the Big Tasty and the Big Tasty with Cheese.

Although they are larger than the traditional Big Mac they do not pack on as many calories - while Big Mac has 540 calories, the Big Tasty with Cheese has 510 and the Big Tasty 460, according to nutritional information provided on the company's US website. No details of what is in the UK pipeline were announced.

The company hopes to sell off more of its company-owned UK businesses to franchisees so it can use the cash to expand in emerging markets such as Russia, Eastern Europe, India and China.

McDonald's said about $225m (£108.6m) of an expected $2bn in capital spending will be allocated to those countries next year. There are plans for 125 new restaurants in China and up to 40 in Russia in 2008.

In the US – and probably headed to the UK in the future – McDonald's is going to focus on improving its drinks lineup, which is bad news for coffee and smoothie vendors.

"Beverages promise to bring a whole new set of customers to McDonald's," said Don Thompson, the company's US president in his presentation. Because of the time and money needed to re-fit its US restaurants with up-market beverage making equipment, McDonald's does not expect coffee and smoothies to be a big contributor to its bottom line until 2009.